LIC Telecommunications Sarl & Anor v VTB Capital PLC & Ors

LIC Telecommunications Sarl & Anor v VTB Capital PLC & Ors

The claim to set aside the sale is precluded because the claimants failed to establish all elements of fraus omnia corrumpit, specifically the existence of a mandatory rule violated or circumvented. The claim for damages based on reflective loss is also precluded as FOC does not disapply the reflective loss rule. However, the claim for direct loss (loss of opportunity to participate in the sale and acquire the shares) is not precluded as a matter of Luxembourg law and may proceed to trial. The FCL does not bar a claim for damages for fraudulent enforcement of a pledge after the event, nor does it bar a claim to set aside in principle if FOC and concert frauduleux are established. All...

Parties
Claimant: LIC Telecommunications SARL; Claimant: Empreno Ventures Limited; Defendant: VTB Capital PLC; Defendant: Delta Capital International AD; Defendant: Maze SARL; Defendant: Milen Veltchev; Defendant: Viva Telecom (Luxembourg) SA; Defendant: Spas Rusev; Defendant: V Telecom Investment SCA; Defendant: V2 Investment SARL
Jurisdiction
England and Wales
Judgment Date
07 February 2018
Procedural Posture
Commercial / Trial of Preliminary Issues
Outcome
Partial success for defendants on preliminary issues; some claims precluded, others to proceed to trial.
Legal Topics
Reflective Loss, Fraud, Abuse of Rights, Financial Collateral Arrangements, Shareholder Rights, Damages, Setting Aside Transactions
Commercial Law Tort Law Company Law Conflict of Laws Reflective Loss Fraud Abuse of Rights Financial Collateral Arrangements +3 more

Case Brief

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Parties

LIC Telecommunications SARL

Claimant

Empreno Ventures Limited

Claimant

VTB Capital PLC

Defendant

Delta Capital International AD

Defendant

Maze SARL

Defendant

Milen Veltchev

Defendant

Viva Telecom (Luxembourg) SA

Defendant

Spas Rusev

Defendant

V Telecom Investment SCA

Defendant

V2 Investment SARL

Defendant

Procedural Posture

Commercial / Trial of Preliminary Issues

Legal Issues

  1. 1 Whether the claimants are precluded from claiming damages for loss of indirect shareholding under Luxembourg law
  2. 2 Whether the claimants are precluded from claiming damages for loss of opportunity to participate in the sale process
  3. 3 Whether the claimants are precluded from seeking to set aside the sale of shares based on fraud (fraus omnia corrumpit) and/or abuse of rights

Ratio Decidendi

The claim to set aside the sale is precluded because the claimants failed to establish all elements of fraus omnia corrumpit, specifically the existence of a mandatory rule violated or circumvented. The claim for damages based on reflective loss is also precluded as FOC does not disapply the reflective loss rule. However, the claim for direct loss (loss of opportunity to participate in the sale and acquire the shares) is not precluded as a matter of Luxembourg law and may proceed to trial. The FCL does not bar a claim for damages for fraudulent enforcement of a pledge after the event, nor does it bar a claim to set aside in principle if FOC and concert frauduleux are established. All...

Court Disposition

Partial success for defendants on preliminary issues; some claims precluded, others to proceed to trial.

Orders

  • Claim to set aside the sale is precluded and struck out as a matter of law.
  • Claim for damages based on reflective loss is precluded and struck out as a matter of law.